California Relaxes Its “Made in USA” Labeling Law

California has amended its strict "Made in USA" labeling standard to bring it more in line with the federal standard enforced by the Federal Trade Commission. The new law, signed in September 2015 by Governor Jerry Brown, continues to prohibit labeling products as "Made in USA" if a product "or any article, unit or part thereof: had been made outside the U.S. However, it now sets forth the following exceptions:

The law does not apply where the foreign content of a manufactured products accounts for 5% or less of the final wholesale value of the product.

The law does not apply where the foreign content is 10% or less of the final wholesale value of the product, if the manufacturer can show that it cannot obtain the foreign parts or articles from within the U.S.

Notwithstanding the changes, the new California law is somewhat different from the FTC standard, which requires that "all or virtually all" of the product must be made in the U.S., but which does not incorporate strict value-based requirements for determining when products qualify for USA-made claims.